Ask Matt: Are any retailers worth investing in?

A: Investors have soured on retail stocks. And for good reason. Wal-Mart (WMT) and J.C. Penney (JCP) this week didn’t give investors much to look forward to. But investors paying attention can find opportunities amid the mess.

But retail is front-and-center again this week as reports are due. Investors are expecting many large retailers, including Target (TGT) and Abercrombie & Fitch (ANF) to post profit declines for the just-completed quarter when they report this week. Sears is expected to lose money during the just-completed quarter, again.

That’s not to say investors with courage and patience can’t find some interesting opportunities in the retail stock wasteland. But it’s slim pickings. Just four out of the 31 retailers in the Standard & Poor’s 500 get “buy” ratings from S&P Capital IQ and are also rated “outperform” by Wall Street analysts, according to a USA TODAY analysis of data from S&P Capital IQ. Some of these stocks aren’t for the weak at heart. Shares of apparel discounter Ross Stores (ROST) are down 13% this year. Even so, Wall Street analysts say there’s still 18% upside for the stock until it hits their 18-month price target. Other retail stocks that might be worth a look are Dollar Tree (DLTR), online travel agent Expedia (EXPE) and The Gap (GPS). Analysts are calling for 7% upside to Gap’s price and say profit will rise in the just-finished quarter.

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.